Studied by 2 peoplefour profitability ratios
gross profit margin mark up net profit margin return on capital employed
ratio: gross profit margin
gross profit/revenue x 100
ratio: markup
gross profit/cost of sales x 100
ratio net profit margin
net profit/ revenue x 100
interfirm
between different firms, for example, comparing the performance of two different house builders
intrafirm
within the firm, for example, comparing this year's results with last year's, or the performance of the Leicester branch of a retail store.
Stakeholder
anyone with an interest in the activities of a business, whether directly or indirectly involved.
return on capital employed ROCE
net profit before interest and tax/ capital employed x 100
measuring liquidity
liquidity ratio measures how solvent a business is
Types of liquidity ratio
current ratio acid test ratio/ liquidity ratio (liquid cap)
current ratio
current assets/ current liabilities
Note
Flashcard